Applebee Affidavit

8/13/2019 Applebee Affidavit

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STATE OF NEW YORKSUPREME COURT COUNTY OF ALBANYNEW YORK STATE UNITED TEACHERSby its President RICHARD C IANNUZZI, NAOMIAVERY, SETII COHEN, TIMOTHY M1CHAEL EHLERS,KATHLEEN TOBIN FLUSSER, M1CHAEL LILLIS,ROBERT PEARL as a Parent, Individually and on behalfof his childrenKYLEIGH PEARL, MICAELA PEARL,AVA PEARL and NOLAN PEARL, BRIAN PICKFORD,HILARY STRONG as a Parent, Individually and on behalfof her child KEVIN STRONG,

Plaintiffs,-against-

The STATE OF NEW YORK, ANDREWM. CUOMOas Governor of the State of New York, THOMAS P.DiNAPOLI s Comptroller of the State ofNew York,and JOHN B KING, JR., as Commissioner of theNew York State Education Department,

Defendants.

AFFIDAVIT OFPETER APPLEBEEIndex No.: 963-13Hon. Kimberly A O Connor

STATE OF NEW YORK ))ss.:

COUNTY OF ALBANY )

PETER APPLEBEE, being duly sworn, deposes and says:1 I currently serve as Manager of Higher Education, Education Finance, and Federal

Programs within plaintiff New York State United Teachers' ( NYSUT ) Research Department.

Prior to joining NYSUT in 2010, I served as Assistant Chief Budget Examiner for the New YorkState Division of the Budget, Deputy Director and Assistant Director ofthe New York State SenateFinance Committee, Director and Assistant Director of the New York State Senate Education

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Committee, Program Associate in the ew York State Senate s Office ofCounsel and Program, andEducation Finance Associate for the ew York State Senate Education Committee. In all, I havenearly 20 years of experience in the government sector with budget analysis. In these positions Iplayed significant roles in analyzing and negotiating education budgeting on behalf of both theExecutive and the State Senate. My knowledge and expertise gives me unique insight into theeffects of the tax cap insofar as school funding.

2 I submit this affidavit to provide background on the tax cap s requirements, thedisproportionate impact it has on school districts versus other municipalities, the overall effect thecap has on perpetuating funding inequities between wealthy and poor school districts, andspecifically how that perpetuation has affected and will continue to affect student performance.

Summary o[Chapter 9 ofth Laws [2 113 In June, 2011, the Governor signed Chapter 97 of the Laws of 2011. Chapter 97

enacted a tax cap for both municipalities and school districts starting with fiscal years that began inthe 2012 calendar year. There is no tax cap imposed on ew York City.

4 Chapter 97 has been described as establishing a two percent tax cap. However, themeasure actually prohibits any tax increase without voter approval. Prior to the cap, after a schoolbudget was defeated, a school board could impose a contingency budget that levied a tax increase,albeit within certain statutory spending parameters. Under the cap, without voter approval a schooldistrict may not increase the tax levy above the previous year s levy. In order for a district toincrease their tax levy within the calculated tax levy limit, a simple majority of voters must approvethe budget. However, if a district wishes to raise the levy above their tax levy limit, then at leastsixty percent of the voters must approve the budget.

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5 Chapter 97 severely limits the abilityofschool districts to provide a quality educationand will impair the ability of districts to close the student achievement gap in New York. The taxcap has had, and will continue to have, a detrimental effect on public schools in this state,particularly in low wealth communities.

6. This cap is pernicious in a variety ofways. First, school districts cannot increase thetax levy without voter approval. Second, this limit on taxation is not connected or measured againstany educational needs the students of a district may have. Third, schools with growing enrollmentare at a significant disadvantage since the school district may not add tax levy to hire additionalteachers, add bus routes, etc., as enrollment rises. Therefore if a district experienced a ten percentgrowth in student enrollment, the district may not increase the tax levy to fund the additional servicesrequired for these new students. Fourth, districts that are required to pay a refund of taxes as a resultof a tax certiorari process may not raise additional tax levy to make such a payment. In manyinstances, a large tax certiorari covers multiple tax years and the sum can be significant relative to

district size. n addition, the tax certiorari process is a challenge to assessment levels which are notset by the district.

7. The contingency budget construct is particularly problematic for school districts. fa district fails to pass a budget, then the district must adopt a contingency budget. Under Chapter97 a district on a contingency budget cannot increase the dollar value ofthe levy above the prior yearlevy. In addition, the district incurs a permanent loss of the tax base generated by new constructionwhen on a contingency budget. A district on a contingency budget may not increase the dollar valueof the levy even if new construction occurs. Assume a large commercial construction project isundertaken in a small low-wealth school district. This large construction project may add 50 to

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the total taxable value in the school district. However, if a school district is on a contingency budgetin the year when this project first appears on the tax rolls, the school district would be required toreduce the tax rate proportionately to ensure that the total number of dollars collected via the tax levydoes not increase above the prior year. In future years the district does not receive the benefit of theincreased tax base since the exemption for new construction only relates to new construction thatoccurs in that tax levy year, not in prior years.

Disproportionate Impact on SchoolDistricts ompared to Other Municipalities

8 The process by which the tax cap may be overridden is substantially different forschool districts versus all other entities covered by the tax cap enacted in Chapter 97 of 2011.School districts are required to obtain a sixty percent yes vote from the public in order to exceedtheir tax cap. In addition, a school district is required to place on the ballot a notice which indicatesto voters that the proposed budget would increase the tax levy above the allowable tax levy limit.All other non-school municipalities covered by the tax cap must only 0 btain a sixty percent maj orityof the governing board of the municipality. Ifa municipal entity has a three or five member board,a simple majority is the same number of votes as a sixty percent majority. The effect of thisbifurcated system between school districts and municipalities is to set a higher bar for schoolsdistricts to exceed their tax levy limit. As a result fewer school districts are able to exceed the taxcap.

9. There have been two years of tax levies that have been subj ect to the tax cap. InSeptember 2012, the Governor issued a report which detailed that out of3 077 local governmentsand school districts reporting, 84 percent reported a levy within the capped amount for the 2012-13

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year. The report found that a much lower percentage ofschool districts were able to exceed their taxlevy limit 36 of 678 or 5 percent of school districts exceeded their tax levy limit. This iscomparable to 455 of2,399 or 19 percent of (non-school districts) local governments reported theirproposed levy exceeded the cap.

10 The data for 2013 indicates a similar disparate impact of the tax cap on schooldistricts compared to other municipalities. The State Comptroller's Office collected data frommunicipalities on how many planned to exceed their tax cap limit for 2013. In 2013, 33% ofcounties (19 of the 57 non-NYC counties) indicated they would exceed the cap. The 19 overridecounties include Albany County, even though the Office of the State Comptroller data set did notinclude Albany County. Albany County did exceed their tax levy limit in 2013(http://blog.timesunion.comllocalpolitics/I37 albany-county-exceeds-tax-cap-again-with-gov-help/).

11 There are 62 cities in New York State but the cap doesn't apply to New York City.

Fourteen of the sixty-one cities (23%) to which the tax cap applies indicated they would overridetheir tax cap for 2013.252 of the 932 towns (27%) indicated they would exceed their tax cap. 195of the 551 villages (35%) indicated that they would override their tax cap.

12 However, only 28 of the 669 districts (4%) which held budget votes attempted tooverride their tax cap for the 2013-14 school year. There were 28 school districts that attempted tooverride their tax levy limit, meaning the budget proposal required a super-majority 60% yesvote in order to be adopted. f those 28 districts, 7 were successful n reaching that 60% thresholdon the first attempt and 21 were defeated. f the 21 defeated districts, 14 achieved a maj ority votebut failed to reach the 60% threshold. On re-vote, only three (3) of the defeated budgets were

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successful in piercing the cap. Furthermore, three (3) additional districts failed to garner majorityapproval on re-vote and, under the tax cap, those districts were required to adopt contingencybudgets that levy a tax no greater than the year before. Notably, two of those three districts aresignificantly less than average in terms ofwealth: Remsen Central School District (.698 CombinedWealth Ratio)1 and Wilson Central School District (.587 CWR). The chart below illustrates thisdisparate impact.

2013 Local Governments Number that Planned Attempted toOverride their Tax Cap

Percentage

School Districts 28 4%Counties 19 33%Cities 14 23%Towns 252 27%

Villages 195 35%

The Tax Cap Increases Funding Inequitiesetween Wealthy n Poor Districts

13. The 2012-13 School Property Tax Report Card, published by the ew York StateEducation Department, included data on tax levy and school spending. As illustrated below, thenumbers staggeringly show that the districts that are able to raise significantly more revenue evenwithout piercing the cap already spend significantly more per student. This disparity willundoubtedly widen as a result of the cap.

1 The Combined Wealth Ratio (CWR) is a measure of relative wealth, indexing each district against thestatewide average on a combination of two factors, property wealth per pupil and income wealth per pupil. The stateaverage CWR is defmed s being equivalent to 1.0. Districts with a ratio greater than 1.0 are wealthier than the stateaverage, while districts with a ratio ofless than 1.0 have below average wealth.

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2012 13 Change in Tax LevyDecile by Combined

Wealth RatioChange in Levy Per Pupil Spending per Pupil

Poorest Decile 114 19,8232n Decile 133 19,3433r Decile 206 19,2418th Decile 523 22,5109th Decile 614 26,066Wealthiest Decile 704 35,690

14. n 2012-13, the poorest districts only raised their tax levy per pupil by amountsbetween 114 and 206 dollars, whereas the wealthiest districts increased their levy per pupil byover 700 dollars. This further exacerbates the spending differences between low and high wealthcommunities.

15. Clearly, there is a significant spending difference between lowwealth and high wealthdistricts. n 20 12-13 the wealthiest districts spent 80 percent more per pupil than the poorest districtsas ranked by the Combined Wealth Ratio. The poorest decile of districts spent 19,823 per pupiland the wealthiest district spent 35,690 per pupil, even though the educational needs of pupils inpoorer districts tend to be greater.

16. The table below represents the total amount of tax levy per pupil that would begenerated if every district in the respective deciles rose up to their maximum allowable tax levy limitunder their tax cap calculation without needing a super majority voter approval. The wealthiestdistricts already spent over 80 percent more than the poorest districts and the tax cap only allowspoor districts to raise 4,970 per pupil, less than 20 percent of the amount of dollars which highwealth districts can raise ( 27,313). This will increase the spending disparity over time between lowwealth and high wealth districts.

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Total Allowable Tax Levy Per Pupil Under the Tax Levy LimitDecile 2013-2014Poorest $4,970Wealthiest $27,313

School nd Student Performance17. The state administered new assessments in the Spring 2013 which were aligned with

the new Common Core Learning Standards. The results from those assessments indicate aninexorable correlation between performance, wealth levels, and spending per student. The chartbelow displays the percent ofpupils who scored at proficient or higher on the grades 3 8 Math andEnglish Language Arts exams. Districts are sorted by the Combined Wealth Ratio. The poorestgroups of districts have less than 25% ofpupils scoring at a proficient level on the State exams andspend approximately $19,800 per student. On the other end of the spectrum, the wealthiest groupsof districts have almost 50% of their pupils reaching the proficiency level and spend $35,690 perstudent. The chasm between these numbers will only widen if the lower performing districts are

continued to be deprived oflocal control over budgeting, particularly in light of the state's failureto meet its funding obligations. See the chart below.

Percent Proficient on 2 13 Grades 3 - 8 Math nd ELA ExamsDecile y CWR ELA Proficiency Math Proficiency Spending Per Pupil1 (Poorest) 21% 18% $19,8232 25% 22% $19,3433 28% 25% $19,2414 29% 27% $20,1145 31% 28% $19,3606 32% 28% $20,3457 39% 36% $21,0928 40% 37% $22,5109 43% 40% $26,066

10 (Wealthiest) 49% 45% $35,690


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18. For all the reasons set forth above, I respectfully submit that defendants motion todismiss should be denied in its entirety.

MATTHEWE. BERG =RONNotary Public, State o YorkNo.02BE6092817Ql alffied in Onondaga COY

CommISsion Expires May JJ _

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Applebee Affidavit